The six principles essential for blockchain adoption

Accounting giant Deloitte has published a report that explores key advisory principles essential for blockchain adoption on a global scale.

The authors said blockchain has attracted significant attention in the global financial services community. Researchers and investors are increasingly interested in the transformative and disruptive ability of this technology to: facilitate an exchange of value; enable the safe storage of value; achieve operational efficiencies; secure cost savings; increase industry transparency; and enhance customer experiences.

The report, prepared during the summer by the Deloitte EMEA Blockchain Lab in Dublin in association with Deloitte Hong Kong and US, mentions six control principles required for blockchain adoption in financial services.

The six control principles include:

Best practice – Standards for Blockchain Development: This pricinple focuses on 3 macro factors – governance, legal and regulation, standards – which are essential to the widespread adoption of private blockchain within the financial services in the long term.

Interoperability and System Integration Controls: This principle focuses four key areas – security considerations, integration with legacy systems, data integration and security mechanisms. It examines the introduction of the technology into an enterprise, and the need to ensure that it is capable of integrating and interoperating with other systems, including other blockchain solutions and technologies.

Audit Rules: This principle explores how blockchain can transform the way in which auditors extract, test and analyse data. Deloitte said that layering blockchain technology with audit analytics could yield standardized, sophisticated audit routines and analysis that enable near real-time evaluation of transactions across the blockchain.

Cybersecurity Controls: This principle explores cybersecurity considerations related to cryptographic and immutable nature of blockchain technology; they include key management, risk of attacker overpowering a private blockchain, centralisation of authority within the network and privacy and the right to be forgotten.

Enhancement of Traditional ICT Controls: This focuses on security management, system development and change management, and information processing.

Business Continuity Planning: Deloitte said that while blockchain itself is a new and powerful technology, its components are well understood. Ensuring high quality business continuity planning for blockchain solutions will involve collation and aggregation of these existing processes into a unified package.